LeBron James’s Heat Face Breakup Under NBA Owners’ Latest Labor Proposal

LeBron James predicted a year ago that he and new teammates Chris Bosh and Dwyane Wade might win up to seven National Basketball Association championships with the Miami Heat.

The so-called Big Three may be broken apart long before getting anywhere near that number if NBA owners get the salary limits they want in a new labor agreement.

Management is proposing a hard salary cap, a no-wiggle-room ceiling on what teams can pay players. The existing contract has a flexible, or soft, cap that allows clubs to exceed this season’s $58 million threshold -- $13 million more than the owners have proposed and $14.5 million more than James, Bosh and Wade alone receive.

“If you lower the cap and harden it, there’s going to be teams that are going to have to make some tough decisions,” said Steve Patterson, former president of the Portland Trail Blazers and founder of Lake Oswego, Oregon-based Pro Sports Consulting LLC. “Certainly, Miami is one of them.”

Patterson said he told owners four years ago that for low- revenue clubs to break even, a hard cap of about $45 million was required.

“There were a lot of eye rolls,” Patterson said in a telephone interview. “And here we are.”

Owners included a hard cap in contract proposals for years but always backed off in exchange for concessions that have included shorter contracts and smaller annual raises. Such flexibility might disappear this time, said Russ Granik, who spearheaded management’s labor talks with players when he was the NBA’s deputy commissioner from 1990-2006.

Firm Stance

“The owners seem to have a much greater seriousness to it,” said Granik, who now works for Galatioto Sports Partners LLC, a New York-based sports-financing firm.

As free agents, James, a two-time league Most Valuable Player, and Bosh, a four-time All-Star, chose in July to play for Miami, which is facing the Dallas Mavericks in the NBA Finals. They joined a roster anchored by Wade, MVP of the Finals in 2006, the Heat’s lone championship season. James and Bosh make about $14.5 million a year, Wade about $14 million.

The Heat won Game 1 of the Finals, 92-84, two days ago. Game 2 is tonight in Miami before the best-of-seven series switches to Dallas for Games 3, 4 and, if necessary, 5.

James is 26 years old, Bosh 27, Wade 29, and all are signed through 2013-14 with player options after that. The NBA offer, made last month, includes a two-year phase-in for the hard cap, which would allow teams like Miami time to weigh roster options.

“We’re going to play forever,” Bosh said, laughing, during an interview yesterday. “We just need to come to a resolution.”

NBA Commissioner David Stern was asked before Game 1 if he was concerned about teams like the Heat having to shed one of their stars due to salary constraints.

‘Complex’ Issue

“This is very complex,” he said. “That’s part of the negotiation.”

Heat Senior Vice President and Assistant General Manager Andy Elisburg declined to comment on the roster implications of a hard cap.

Wade said in a news conference that he wasn’t thinking about it during the Finals. “Right now it’s the least of my worries,” he said.

Others teams with multiple highly paid stars -- the Boston Celtics with a payroll of $83 million this season, and San Antonio Spurs with a $70 million payroll, for instance -- might also face upheaval, Granik said.

“Teams will have to adjust,” he said in a telephone interview. “That’s part of running a professional sports franchise these days, being ready to adjust to different rules.”

More Talks

Stern said that teams will lose about $300 million this season. What owners want, he said, is a collective bargaining agreement that allows well-managed teams to compete for a championship and make a profit.

Representatives for the owners, including Stern and Deputy Commissioner Adam Silver, and the players, including union Executive Director Billy Hunter, are scheduled to hold negotiating sessions on June 7 and 8 in Dallas after meeting this week in Miami.

The collective bargaining agreement expires June 30.

The players, Hunter said, are vehemently opposed to a hard cap, which is used in the National Hockey League and National Football League, where owners imposed a lockout in March.

“What you say to the union is that if you understand our goals, but you seem to have religion on no hard cap, then present to us alternative ways to achieve the same end,” Silver said.

Season Turnaround

While an inflexible cap would leave many teams with personnel decisions, none would be as dramatic as the Heat. After a 9-8 start, they wound up 58-24 and second to the Chicago Bulls in the Eastern Conference. They have lost only one game in each of their first three playoff series, to the Philadelphia 76ers, the Boston Celtics and the Bulls.

James, Wade and Bosh are now three wins from title No. 1 as teammates. Whether they meet James’s prediction might hinge more on lawyers than lay-ups.

“It’s the flip side to more fiscal sanity,” Patterson said.

To contact the reporter responsible for this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net

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